Wednesday, 29 August 2012

Dreamliner for Air India

Air India Ltd. is set to take delivery this week of its first 787 Dreamliner jet after a wait of some four years and following a long, public battle between the airlines and Boeing Co. over compensation for the delay.
The first of the aircraft could land in New Delhi Wednesday or Thursday, and two more will follow "in quick succession," an Air India executive told Dow Jones Newswires Monday.

If some formalities, such as documentation, "are completed today, the first plane should arrive Wednesday or Thursday," said the executive, declining to be named.
Air India ordered a total of 27 Dreamliner jets in 2005 as part of a $15 billion, 111-plane contract with Boeing and Airbus.
The delivery of the long-range Dreamliners will be a boost to loss-making Air India's efforts for a turnaround by starting flights to new destinations.
Starting additional flights are crucial for Air India to regain market share, especially on its overseas routes, which have been weaned away by carriers such as Emirates, Lufthansa and Singapore Airlines.
The fuel-efficient Dreamliners would also enable Air India to cut costs by replacing older planes. Air India has posted losses for the past five years, due partly to high fuel and interest costs, which have been exacerbated by intensifying competition on domestic and overseas routes.
Dinesh Keskar, president of Boeing India, didn't immediately respond to questions.
Air India will join two Japanese carriers--All Nippon Airways and Japan Airlines Co.--in operating the Dreamliner.
The delivery of the twin-aisle planes were delayed for several years due to production problems at Boeing, leading Air India to seek compensation from the aircraft manufacturer.
Earlier this year, India's aviation ministry said it had asked Boeing to pay nearly $1 billion to Air India for the delay and that the Chicago-based company has agreed to pay half that amount.
Boeing disputed that claim.
The Indian government on Aug. 3 permitted Air India to take delivery of the planes from Boeing after the two sides signed a compensation agreement, details of which weren't revealed.
The Air India executive said the planes would be deployed initially on domestic routes for six to eight weeks, before moving on to international routes.
"We will start with flights to Melbourne and Sydney, as well as western Europe," the executive said.
Boeing will deliver the first three Dreamliners from its new North Charleston facility in South Carolina.
Responding to a question about the recent failure of a General Electric Co. GEnx engine during a taxi test in South Carolina on a Dreamliner destined for Air India, the executive said: "We wouldn't have taken delivery of the planes if they were not safe."
He declined to elaborate.
The executive said Air India plans to raise money by selling the planes to leasing companies and hiring them back on a monthly basis, a common exercise among airlines to raise funds.
The airline has arranged a bridge loan of $195 million from Standard Chartered Bank to fund the purchase of the first batch of two Dreamliners.
It is seeking an additional $500 million loan for the next four Dreamliners.